Quality, Productivity, & Competitive Position Seminar
byNida Backaitis & Ron MoenLas Vegas13-16 October 2003
DAY 1 (Monday, October 13)
8:00 a.m.Registration9:00Welcome and Overview of SeminarQuality and the customerDr. Deming: How are we doing? (Ch.1)Facilitator Presentation: Small Group Discussion10:40-Break-11:00Small Group Discussion Dr. Deming: The Heavy Losses(Ch.2)12:00-Lunch-1:00Facilitator Presentation: Small Group Discussion Dr. Deming: Introduction to a System (Ch.3)2:40-Break-3:00Facilitator Presentation: Small Group DiscussionDr. Deming: Destruction of a System (Ch.3)4:00 Working Group Session5:00Stop
DAY 2 (Tuesday, October 14)
8:00 a.m.Reports of Working Groups Review of Day 1, questions9:00-Break-Dr. Deming: The System of Profound Knowledge (Ch.4)Facilitator Presentation: Small Group Discussion10:40-Break-11:00 Dr. Deming: The Experiment with the Red Beads (Ch.7) Facilitator Presentation: Small Group Discussion12:00-Lunch-1:00Marshall IndustriesDr. Deming: Motivation(Ch.4)2:40-Break-3:00Facilitator Presentation: Small Group DiscussionLeadership and Management of People (Ch.5-6)4:00 Working Group Session5:00Stop
DAY 3 (Wednesday, October 15)
8:00 a.m.Reports of Working Groups9:00-Break-9:15API Model for Improvement: PDSA (Ch.6)Prediction Game10:40-Break-11:00 Dr. Deming: Education(Ch.6)12:00-Lunch-1:00Dr. Deming: Shewhart and Control Charts (Ch.8)Facilitator Presentation: Small Group Discussion2:40-Break-3:00Dr. Deming: Common Causes of Accidents (Ch.8)Facilitator Presentation: Small Group Discussion4:00Stop
DAY 4 (Thursday, October 16)
8:00 a.m.Review of Day 3, questions Dr. Deming: The Funnel Experiment (Ch.9)9:00-Break-9:15Facilitator Presentation: Small Group Discussion10:40-Break-11:00Dr. Deming: Some Lessons in Variation (Ch.10)Facilitator Presentation: Small Group Discussion12:00-Lunch-1:00Remarks on Service IndustriesCommon misunderstandings of Demings philosophy1:45Memories of Dr. W. Edwards Deming2:00Reflections of Seminar2:30Close
1.0 Overview of Seminar
What topics would you really be disappointed if we did not cover them by Thursday afternoon?
1.1 Quality and the customer
Where do customer expectations come from? Will happy and loyal customers ensure business success? Will zero defects keep you in business? What is the source of innovation? Who in an organization is responsible for the quality of a product or service that the organization produces?
1.1 Quality and the customerWhere do customer expectations come from? The company: customers never asked for TV, etcWill happy and loyal customers ensure business success? No look to the future! Duties of a leader. Carburetor exampleExample: typewriters Will zero defect keep you in business?No. Pg. 11 & 13What is the source of innovation?Employees of company, supplier, study customer. Who is an organization is responsible for the quality of a product or service that the organization produces?Top management is responsible for the system, so they have to decide.
Thierry.Brusselle - Porter and threat of new entrant applies here as well. Look at substitue product and threat of new entrant to help design new product.
1. A persons performance on the job is largely under his or her control2. Weaknesses of an individual that are identified by the appraisal system can be remedied by the individualStronglydisagreeDisagreeAgreeStronglyAgreeStronglydisagreeDisagreeAgreeStronglyAgree1.2 Some Assumptions
3.Everyone has a need for recognition
4.Judging people is not harmful to themStronglydisagreeDisagreeAgreeStronglyAgreeStronglydisagreeDisagreeAgreeStronglyAgree
5.Competition will improve performance
6.All variation (in a measure) can be explainedStronglydisagreeDisagreeAgreeStronglyAgreeStronglydisagreeDisagreeAgreeStronglyAgree
1.3 Dr. Deming: The Heavy Lossesx + [yx] = 8Where: x = contribution of the individualy = contribution of the systemyx = effect of the system on his performance8 = performance of the individual
Small Group Discussion:Give some examples of jobs where 1. x = 0 (or close to 0) 2. yx = 0 (or close to 0)
1.3 Dr. Deming: The Heavy LossesDiscuss the pros and cons of the present practice of Setting numerical goals
Appreciation of a systemStrong relationships with vendors and distributorsSupplier and customer working together as a system continuously
Thierry.Brusselle - problem with working with vendor is what happened in Detroit. Too much of a relationship with vendors helped them keep competitors out. Leads to anticompetitive behavior.
1.4 Introduction to a System
A system is a network of interdependent components that work together to try to accomplish the aim of the system.Properties of a system include:A system must have an aim. The aim is a value judgment.A system must be managed. It will not manage itself. If components are left alone, they will tend to optimize themselves.Optimization of the components does not optimize the whole (because of interdependence).The larger the system, the more difficult it is to manage. A system cannot understand itself. Help must come from outside the system.The performance of a system depends more on how its components interact than how they act independently of each other
1.4 Demings view of Production as a System (1950)Aim
Evolving ViewDeming (1950) - anything by this author
Senge (1990) The Fifth Discipline and Fieldbook
Margaret Wheatley (1992) Leadership and the New Science
Russell Ackoff: Recreating the Corporation: A Design of Organizations for the 21st Century (1999)
Whole consisting of two or more parts that satisfies the following five conditions:
(1). The whole has one or more defining properties or functions.
(2). Each part in the set can affect the behavior or properties of the whole.
(3). There is a subset of parts that is sufficient in one or more environments for carrying out the defining function of the whole; each of these parts is necessary but insufficient for carrying out this defining function.
(4). The way that each essential part of a system affects its behavior or properties depends on (the behavior or properties of) at least one other essential part of the system.
(5). The effect of any subset of essential parts on the system as a whole depends on the behavior of at least one other such subset.Ackoffs Definition of System
Properties of a System (Ackoff)System is a whole that cannot be divided into independent parts without loss of its essential properties or functions
When the performance of the parts of a system, considered separately, are improved, the performance of the whole may not be (and usually is not) improved.
U.S. Fishing Industry - New England Waters
Profitability Brings High Tech Foreign Competition
U.S. Fishing Industry LobbiesLow interest loans to upgrade technology
Better enforcement of international borders
ResultsHelp U.S. industry be more competitive by equipping them with better technology and by better border enforcementIncreased yields and profitabilityLow interest loans attract additional entry into the U.S. fishing industryWaters become more crowded with better equipped shipsDecreased yields and profitabilityIntendedUnintended
USG to the Rescue AgainSolutions:
1. $Incentives$ to EXIT the Industry2. Sink ships to create artificial reefs - fertile breeding ground for fish
1.5 Sub-optimization of a System
Point of View of SalespersonImpact onOrganization?
Impact on theCustomer?
MBOs Create Local Optimization and Supplant the Aim of the Organization; Customer often Gets LostCredit dept: days outstandingDivision managers: division P&LMarketing: Sales vs forecastSales: Gross profit dollars, quotasManufacturing: QualityOperations: On time delivery
DesignandRedesignConsumerresearchSuppliers ofRaw MaterialsReceipt andtest of MaterialsConsumersDistributionTest of processes,machines, methods,costsProduction, assembly, finishing, inspectionA
GStage 0:Generation of ideasAimSupplanted Aim Distorts Effort within the OrganizationDoes anyone givea hoot about makinga profit?
Does anyone give a hoot
about making a profit?
1.6 Demings view of Production as a System (1994)Stage 0:Generation of ideas
1.6 Advantages of viewing your organization as a system
The diagram directs the knowledge of the organization to the aim of the system, geared to the marketThe built-in cycle to design and redesign allows the organization to develop new products and servicesThe diagram shows people what their jobs are and how they should interact with on another as part of a systemThe diagram makes it possible for managing the components as a system toward achievement of the stated aim (optimization)
The drivers of the systemWhat? Products and services, Processes and systems Why? To better match the present & future needs of the consumersMethods?Plan for improvementIntegrate with business planningDevelop objectives, establish charters Manage improvement effortsProvide guidance, remove obstaclesRedirect & redeploy resources
What? Communication and feedback between the manufacturer and users and potential users of the product or serviceMethods?Sampling and design of experimentsArt of questioning and interviewingStage 0:Generation of ideasDesign and RedesignConsumer research
Deming on Stage 0: Generation of ideas (1994) The 0-t